New regulations on management, use of ODA, concessional foreign loans

The Government has issued a decree on the management and use of official development assistance (ODA) and concessional foreign loans.

Dated and taking effect on September 10, 2025, Decree 242/2025/ND-CP stipulates the management and utilization of ODA and concessional loans provided by foreign governments, international organizations, intergovernmental or transnational bodies, and authorized governmental organizations (foreign donors) to the State or Government of Vietnam.

It sets out four forms of ODA and concessional loan provision: programs, projects; non-project assistance; and budgetary support.

On priorities for the use of such funds, the decree specifies that non-refundable ODA will be given precedence for socio-economic infrastructure development programs and projects; capacity-building; disaster risk reduction, relief and epidemic control; climate change response and adaptation; green growth; science, technology, innovation and digital transformation; social welfare; project preparation; and co-financing of projects using concessional loans to increase their grant element.

ODA loans will be prioritized for programs and projects with no capacity for direct capital recovery in health, education, vocational training, climate change adaptation, environmental protection, and essential economic infrastructure.

The decree reiterates a key principle in state management of ODA and concessional loans: they are to be used exclusively for development investment expenditure, not for recurrent spending.

The Government shall exercise unified state management of ODA and concessional loans, ensuring both the efficiency of capital use and debt repayment capacity. Identification of eligible development investment expenditures will follow the law on public investment, the state budget law, the construction law, and other relevant legislation.

The new decree replaces the Government's Decrees 114/2021/ND-CP and 20/2023/ND-CP.-

By VNA/VLLF